1. I have a Roth IRA, but recently my wife and I reached annual income that makes contributions not permitted anymore. We both have 401ks at our work - Does the same rule apply to a Roth 401k?

  2. If we both contribute the maximum to 401k (from my understanding the maximum is 18K each - so 36k?) If hypothetically subtracting 36K from our annual income means we are below the limit for Roth IRA contributions, does that mean we can then invest the $5500 each?

  • 2
    A side point but if you're at the income limit for Roth IRAs, you might want to reconsider if Roth 401(k) really makes the most sense for you. Your tax rate is quite high and you'd likely be better off taking the deduction now unless you expect your tax rate to be higher in retirement.
    – Craig W
    Feb 23, 2017 at 16:25
  • it's sort of hard for me to predict what my tax rate will be in retirement - i guess if i am "retired" but still making money off investments, would that still put me in a lower tax bracket? i'm also relatively young, so my rational was that tax free earnings would be worth more.
    – K2xL
    Feb 24, 2017 at 18:08
  • For pre-tax vs. Roth, the primary consideration is tax rate now versus tax rate in retirement. Tax-free earnings aren't more valuable if you're young because whether you're taxed before the growth occurs or after, the math works out the same. The only reason you'd lean toward Roth when you're young is because you're probably making a relatively lower salary than you will later in your career. However, if you're at the Roth income limit, you're probably well into the 28% bracket, so you'd likely be better off taking the tax deduction now.
    – Craig W
    Feb 24, 2017 at 18:52

2 Answers 2


Does the same rule apply to a Roth 401k?

No - there is no income limit to participate in a Roth 401(k)

If hypothetically subtracting 36K from our annual income means we are below the limit for Roth IRA contributions, does that mean we can then invest the $5500 each?

If the 401(k) is a traditional 401(k) and not a Roth 401(k) then yes, but you'll need to talk to a tax advisor with your specific information to be certain. A Roth 401(k) contribution is after-tax will not change your AGI.

You might also be able to do a back-door Roth contribution by transferring part or all of a traditional IRA to a Roth IRA. Again talk with a tax pro to make sure you execute the conversion correctly.


As D Stanley correctly stated, no, the income limit doesn't touch the 401(k), Roth or traditional. And, no, the Roth 401(k) deposit doesn't lower your income, and doesn't impact AGI. The traditional IRA deposit/conversion is the way to go.

All that said, I'd ask why you are loading Roth and not using this opportunity for pre-tax deposits? The ideal mix at retirement isn't 100% Roth, nor 100% pre-tax, but the mix that optimizes your lifetime tax bill. Depositing enough money that would have been taxed at 25% or higher, to withdraw it at retirement at 0/10/15 is the optimum mix.

  • 1
    {facepalm} I didn't catch that the Roth contributions were after-tax. I have edited my answer but give you full credit :)
    – D Stanley
    Feb 23, 2017 at 16:23
  • 1
    Updated mine to agree with your 100% correct answer. And will return to kill the comments as outdated! Feb 23, 2017 at 16:24
  • Actually reading the question again the OP doesn't specify if the 401(k) is roth or not, so maybe I was right the first time :)
    – D Stanley
    Feb 23, 2017 at 16:25
  • Question is ambiguous. Agreed. Feb 23, 2017 at 16:26
  • Sorry if my question was ambiguous! Happy to clear but still not 100% sure on how i can clarify. my work allows me to defer payments each money to a roth 401k and/or a regular 401k. right now i have it split 750 each month because i'm not sure what the best is, but the total of 1500 each month adds up to the 18k per year.
    – K2xL
    Feb 24, 2017 at 18:01

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